AARC AARC - Accredited Automotive Recycler Vehicle Acquisition & Title Processing Questions and Answers 2 — Questions and Answers
Question 1: What is a 'junk title' (also called a 'certificate of destruction') and what restriction does it place on a vehicle?
- A title indicating the vehicle is designated for parts or scrap only and can never be retitled for road use (Correct answer)
- A title for vehicles with minor damage that can be repaired
- A title issued for off-road recreational vehicles
- A temporary title valid for 30 days
Correct answer: A title indicating the vehicle is designated for parts or scrap only and can never be retitled for road use
A certificate of destruction permanently removes the vehicle from road use, making it suitable only for parts harvesting or scrap.
Question 2: When purchasing a vehicle at a salvage auction, an AARC-certified recycler should review the vehicle history report for which critical red flags?
- Odometer rollback, flood damage, title washing, and prior salvage brands (Correct answer)
- Only the vehicle color and trim level
- The original MSRP and dealer invoice price
- The vehicle's warranty expiration date
Correct answer: Odometer rollback, flood damage, title washing, and prior salvage brands
Undisclosed flood damage, title washing, or odometer fraud can reduce parts value and expose the recycler to legal liability.
Question 3: What is 'title washing' and why is it a concern for AARC-certified recyclers?
- The illegal practice of moving a salvage-branded title through states to obtain a clean title, concealing the vehicle's damage history (Correct answer)
- The process of legally clearing a lien from a title
- Cleaning the physical title document before transferring it
- A NMVTIS audit procedure
Correct answer: The illegal practice of moving a salvage-branded title through states to obtain a clean title, concealing the vehicle's damage history
Title washing conceals salvage or total-loss history, which can misrepresent part quality and expose recyclers to fraud liability if parts are sold as clean-history OEM.
Question 4: Before acquiring a vehicle, an AARC-certified recycler should assess 'parts yield' — what does this calculation involve?
- Estimating the total resale value of recoverable parts minus acquisition, dismantling, and disposal costs (Correct answer)
- Counting the number of seats in the vehicle
- Measuring the vehicle's wheelbase
- Calculating the vehicle's original fuel efficiency
Correct answer: Estimating the total resale value of recoverable parts minus acquisition, dismantling, and disposal costs
Parts yield analysis ensures the recycler will profit from the acquisition after all operational costs are deducted from projected parts revenue.
Question 5: Which federal law requires auto recyclers who acquire junk and salvage vehicles to report them to NMVTIS?
- The Anti-Car Theft Act, as implemented through NMVTIS regulations (49 CFR Part 580 and DOJ regulations) (Correct answer)
- The Clean Air Act
- The Occupational Safety and Health Act
- The Resource Conservation and Recovery Act (RCRA)
Correct answer: The Anti-Car Theft Act, as implemented through NMVTIS regulations (49 CFR Part 580 and DOJ regulations)
The Anti-Car Theft Act established NMVTIS, and DOJ regulations require junk and salvage yards to report acquisitions to the system.
Question 6: What is the purpose of a 'lien check' when an AARC-certified recycler acquires a vehicle?
- To verify no outstanding loans or financial claims exist against the vehicle that could complicate title transfer (Correct answer)
- To assess the vehicle's fuel system integrity
- To check if the vehicle has been recalled
- To confirm the vehicle's emissions test status
Correct answer: To verify no outstanding loans or financial claims exist against the vehicle that could complicate title transfer
An outstanding lien means a lender still has a financial claim on the vehicle, which must be satisfied before clear title can be transferred.
AARC AARC - Accredited Automotive Recycler Vehicle Acquisition & Title Processing Questions and Answers 2
What is a 'junk title' (also called a 'certificate of destruction') and what restriction does it place on a vehicle?